Monday, May 01, 2006

May - Merger Mania Month

I wanted to be first to post merger mania news for May since everyone is saying this is the year, - like we haven’t heard that before!

I will examine the information and try to bring some new perspective to the deal. I believe all that has been said and written has been done so with too much bias from both sides. The suggestions being tossed out are old hat and without much imagination.

I am hoping that this merger, if it happens, is a result of the two businesses realizing that the combination will yield a profit by becoming one. If it is done for any other reason, such as for one or the others ego, then forget it, it won’t change things. I want the natural order of business to be the driving force here.

So far we have two criteria that have been made public by the protagonists for this deal. Actually both have been put forth by KK, they are; the merger must be one that can last and cannot be done simply for the sake of merging the other, no one can loose. Although that hasn’t been elaborated on I think we all know what that means.

So far TG is quoted as saying there’s a lot of hair on this cat. I suppose that means there are a lot of obstacles facing the merger.

Let’s look at the possibility of the merger being announced this month to be effective for 07 and what it might look like. What is needed to meet the two criteria? The chassis and engine combinations must be decided and must not give either side an advantage. The obvious chassis choice would be the Panoz DP01. It’s the only chassis that neither side has experience with. If the engine choice is turbocharged then Cosworth seem the logical choice however if the engine choice is NA then the Honda seems a likely choice.

What is needed for the new series to begin with the first race in 07? If the car count is simply brought forward there would be a need for 72 Panoz chassis. Since there are likely to be drop outs that number should be smaller. Could Panoz make that many cars in time for next seasons testing? I don’t know but it doesn’t feel good to me!

Also needed would be 72 engines for the season. If it’s NA then Cosworth has to update one, if its turbo then HPD has to dust off the old turbo they had built by Ilmor. Would there be a third engine manufacturer?

Do these combinations pass the tests of making for a lasting business and no one loosing? You decide.

I say these combinations or a variation them of might well work but there is not time for implementation for all of 07. The chassis and engine suppliers simply cannot get it done in time. So then what happens if the merger doesn’t happen for 07 and CC continues with their planned new chassis? Doesn’t that eliminate the window of opportunity for both sides to get a fresh start with new equipment and satisfy the,” nobody looses” test?

Perhaps TG and KK could give the cat a haircut by infusing Panoz with cash to help move the timeline in. But what do you do about the engine problem, more money?
There is a need for some very creative thinking here. As I see it the merger might be best served by happening over a period of time instead of all at once. Perhaps for 07 the only race for the combined series would be Indy the other races would be as before. Then in succeeding years the schedule is combined to make the merger complete. This method would also help to clear the calendar of previous commitments by both sides.

The initial league could be made of two divisions which could have individual champions who might race for the championship in a race off in the last race.

Something different than we are familiar with has to come of this merger if it is going to pass the “long lasting test”.

I would like to add two more requisite tests to the merger. First the costs must be controlled so that the owners can participate without graft and secondly the organization must have a strong independent leader that can lead the new series up out of the ashes. Perhaps a commissioner of sorts?

So what all is stopping this merger? Perhaps nothing, perhaps everything! Frankly I don’t look for a merger to happen in time for 07. But if it does it won’t look like anything we now know. The longer they wait the harder it will be to past all of the tests! But then if they wait much longer there may only be one left, then of course no merger will be necessary!

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